Fed Proposes Direct Banking Access for Stablecoin Issuers

Fed Proposes Letting Stablecoin Issuers Access Banking System Directly Without Banks

The Federal Reserve (Fed) has announced plans to allow stablecoin issuers and fintech companies to access its payment infrastructure directly, eliminating the need for partnerships with traditional banks.

Key Takeaways

The Federal Reserve is proposing new limited-access accounts for stablecoin issuers and fintech companies.
This policy shift marks a significant change, allowing these organizations direct banking access without traditional bank partnerships.
The proposed accounts will have operational restrictions, including no interest on deposits and limits on transaction capabilities.
The Fed is actively engaging with industry leaders, signaling a more collaborative approach towards digital finance.

Direct Access to Payment Infrastructure

Fed Governor Christopher Waller revealed this proposal during the central bank’s first-ever Payments Innovation Conference on October 21. He introduced the concept of “payment accounts” or “skinny master accounts”, designed for legally eligible institutions.

This initiative represents a significant pivot from the Fed’s historically cautious approach towards cryptocurrency firms, many of which have long sought greater access to banking services. Companies like Custodia Bank and Kraken, which have engaged in lengthy legal battles over Fed master accounts, may soon benefit from this more straightforward approval process.

Governor Waller at the Payments Innovation Conference | Source: Federal Reserve

Tailored Accounts for Selected Institutions

The proposed payment accounts aim to offer direct access to the Federal Reserve’s payment systems while implementing risk controls not found in full master accounts. Governor Waller stated, “This payment account concept would be targeted to provide basic Federal Reserve payment services to legally eligible institutions that right now conduct payment services primarily through a third-party bank.”

Institutions granted these accounts will have specific operational limitations to minimize exposure to the Fed’s balance sheet. Notably:

The accounts won't earn interest on deposits.
There may be mandatory caps on balances to manage account sizes.
Participants will lose access to daylight overdraft privileges, meaning transactions will be declined if the account balance drops to zero.
These accounts will exclude certain borrowing options and payment services where the Fed cannot effectively manage overdraft risks.

Waller emphasized that every legally eligible entity could qualify for these accounts under current legal frameworks, with no changes to eligibility requirements. He remarked, “Payments innovation moves fast, and the Federal Reserve needs to keep up.” Companies like Ripple and Anchorage Digital, which submitted master account applications in 2025, may benefit from quicker decisions under this new proposal.

A New Era for Industry Collaboration

The Fed’s announcement garnered significant interest during the conference, which hosted key figures in the crypto industry, including Chainlink CEO Sergey Nazarov, Coinbase CFO Alesia Haas, and Circle President Heath Tarbert.

Waller noted that the decentralized finance (DeFi) sector is no longer viewed with skepticism. “Instead, you are welcomed to the conversation on the future of payments in the United States and on our home field—something that would have been unimaginable a few years ago,” he said.

During discussions, Nazarov highlighted interoperability challenges in merging traditional finance with digital assets and appreciated regulators' proactive involvement in these critical discussions at the Federal Reserve.

Michael Shaulov, CEO of Fireblocks, stressed the advantages of blockchain custody in a resilient financial network, noting that improving regulations in the U.S. support progress in this area. Jennifer Barker of BNY Mellon echoed the need for collaboration between traditional finance and DeFi, stating, “DeFi enables 24/7 dollar movements previously impossible for many banks.”

Although the Fed has yet to indicate a timeline for implementing these payment accounts, Governor Waller mentioned that staff will engage stakeholders to gather insights concerning the potential advantages and disadvantages before finalizing the framework.